Welcome to another edition of The Friday 5 with Steve Greenfield, Founder and CEO of Automotive Ventures, an auto technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies.
At the end of last year, I declared 2020 as the year of the SPAC. At their highs, five EV startups that went public through mergers with special purpose acquisition companies were worth $60 billion. The stock market corrections that followed have been brutal.
Three of the companies plunged to new lows this past week as short-seller attacks, management turmoil and execution issues led investors to reconsider their prospects. They’ve lost more than $40 billion of market capitalization combined from their respective peaks.
The sliding valuations of Nikola Motor Company, Fisker, Lordstown Motors Corporation, Canoo and ARRIVAL underscore the risks surrounding the blank-check boom.
Unlike in a traditional initial public offering, going public via SPAC allows companies to make forward projections to investors during their listings. This was key to ginning up interest in EV companies — while all five are still working on delivering their first vehicles to customers.
And with that, let’s jump right into the technology deals of this past week.
First up this week, big news that DealerSocket will be acquired by Solera. Terms of the deal were not disclosed and the deal is expected to close in the second quarter pending regulatory approval.
Solera also plans to acquire Omnitracs, which provides fleet management software.
All three companies are portfolio companies of private equity firm Vista Equity Partners. Vista bought a stake in DealerSocket in 2014, and Omnitracs in 2013, while a separate Vista fund took Solera private in 2016.
Last year, DealerSocket acquired franchised DMS provider Auto/Mate for an undisclosed price, though court documents estimated the deal at close to $200 million.
The combined companies have more than 9,000 dealership customers.
Earlier this year, Vista Equity Partners was rumored to be combining the three companies within its portfolio to go public through the blank-check firm Apollo Strategic Growth Capital.
In March, the potential $15 billion dollar transaction was reported to be halted due to a decline in technology valuations.
The rumored SPAC would have been Vista Equity’s fourth attempt to exit its investment with Omnitracs and its second attempt to merge Solera and Omnitracs.
This week, auto insurance marketplace Jerry announced that it has raised more than $57 million dollars in funding, including a new $28 million Series B round led by Goodwater Capital. A group of angel investors also participated in the round, including Greenlight president Johnson Cook and Greenlight CEO Timothy Sheehan; Tekion Corp CEO Jay Vijayan; Jon McNeill, CEO of DVx Ventures and former president of Tesla and ex-COO of Lyft; Brandon Krieg, CEO of Stash and Ed Robinson, co-founder and president of Stash.
Jerry is different from other auto-related marketplaces out there in that it aims to help consumers with various aspects of car ownership (from repair to maintenance to insurance to warranties), rather than just one. Although for now it is mostly focused on insurance, it plans to use its new capital to move into other categories of car ownership.
Jerry uses automation to give consumers customized quotes from more than 45 insurance carriers “in 45 seconds.” The consumers can then sign on to the new carrier via Jerry, which would even cancel former policies on their behalf.
ROCSYS, the global leader in robotic EV charging solutions, has raised $6.3 million dollars (or €5.25 million Euros) in a round led by FORWARD.one. The investment provides a solid basis to scale up activities throughout Europe, and launch a North-American business unit, now that robotics starts to enter the global EV charging domain.
The entire investment is done by ROCSYS’ existing investors: FORWARD.one and Superangel.
To date, ROCSYS has raised a total of $9 million dollars (or €7.5 million Euros) since its founding in 2019, which includes additional funding by UNIIQ – Finance for the Future and grants.
PDM Automotive, a 3-year-old company that runs an automotive product data platform for manufacturers and receivers, raised a $4 million round led by FUSE.
The startup provides information on aftermarket automotive parts and other data to companies such as Walmart, Advance Auto Parts, Autozone, Amazon, and eBay. Large automotive parts companies also manage their catalog data with PDM.
The startup spun out of Velocity Automotive, an e-commerce leader in Europe for U.S. auto parts. PDM is led by founders Johannes Crepon and Philipp Crepon.
The company’s revenue doubled in 2020. Johannes said the pandemic has helped drive demand with used car sales rising, an increase in accessory purchases, and supply chain issues all providing tailwinds. PDM has 20 employees and plans to hire more.
In International news this week, WeRide.ai, the Chinese autonomous driving startup backed by Nissan Motor Corporation, Renault Group and Mitsubishi Motors, said it raised “hundreds of millions” of dollars in a funding round that it said valued the firm at $3.3 billion.
WeRide, which is testing vehicles in California, as well as in China’s southern city of Guangzhou – where it is headquartered – and the central city of Zhengzhou, did not disclose details on the size of the funding.
Investors taking part in the latest funding round include IDG Capital and Homeric Capital. It raised $310 million in January.
WeRide is pursuing a Level 4 autonomous standard, in which the vehicle can handle all aspects of driving in most circumstances with no human intervention.
Last month it received a permit to test two passenger vehicles on California’s public roads without a safety driver in the front seat.
Finally, in exciting international news, Indian online auto classifieds platform CarTrade.com has filed a draft “Red Herring” prospectus for an initial public offering to raise approximately $273 million USD for 27% of the company.
In a recent fundraising round, the company was valued close to $1 billion USD.
Congratulations to founder and CEO Vinay Sanghi and the CarTrade.com team for all of their hard work that has gotten them to this great outcome.
Companies to Watch
And on to our Companies to Watch!
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly industry intel report, I showcase a few companies each month, and we take the opportunity here on the Friday Five to share some of those companies each week with you.
Today, our companies to watch are CarIQ and BlueSpace.ai.
First up, we have CarIQ, founded in 2001, and located in Oakland, California.
CarIQ is the first payment solution developed for fleet vehicles, enabling vehicles to autonomously initiate and complete payments for services such as fuel, tolls, parking and more.
Car IQ’s platform makes it easy for fleet managers to onboard vehicles and replace personal credit and debit cards with direct connections from vehicle to financial institution. This creates a secure payment experience, simplifies accounting and eliminates disputes over questionable transactions.
Car IQ’s dynamic identity verification is the foundation of their proprietary technology Know Your Machine process. The process makes it possible for vehicles to directly request, then validate / revalidate and pay for services rendered.
CarIQ creates a secure payment experience, simplifies accounting and eliminates disputes over questionable transactions.
Our second Company to Watch this week is BlueSpace.ai, founded in 2019 and located in Santa Clara, California.
BlueSpace.ai is a software company that was founded to solve the “black box” problem of perception and prediction in autonomous driving.
Their software uses an innovative approach to perception and prediction that captures the full motion of any object.
BlueSpace’s revolutionary technology enables verifiable safety, high performance, and scalable deployment of any autonomous driving system that exists today.
So that’s your weekly Friday 5, a quick wrap-up of the big deals in automotive technology over the past week.
It’s an exciting time to be in the automotive space, with a ton of deals going on. Make sure you stay tuned in each week to stay up to date on the auto industry’s technology M&A activity. I’ll keep my fingers on the pulse of deals being done, so I can share updates with you.
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